Property and banking groups push FTSE higher

Property companies and banks led the UK market higher despite an opening decline on Wall Street.

Hammerson added 23.25p to 334p after JP Morgan raised its recommendation from neutral to overweight, saying the group's £584m rights issue means it should have no further refinancing to do until 2012. The bank also suggested Hammerson could prove an attractive takeover target for a rival such as British Land, up 20.25p to 422.25p, or Unibail. It said:

"Based on Hammerson's positioning we believe it could be an attractive M&A candidate in any potential industry consolidation. We note that within the sector only two companies - British Land (committed credit lines) and Unibail (strong balance sheet) - would have the financial resources to engage in M&A activity."

A host of property businesses have already tapped shareholders for cash and Liberty International, 12p higher at 328.5p, is widely tipped to follow suit when it reports full year results tomorrow. Singer Capital Markets suggested the company could raise £360m with a two for three issue at a deeply discounted 150p a share. But industrial specialist Segro rose 10.75p to 97.75p as it renegotiated covenants on its £1.7bn of debt, easing concerns of an imminent cash call.

As for the banks, Royal Bank of Scotland added 1p top 23.1p, while Lloyds Banking Group closed up 3.5p at 57.4p. They were both lifted by the expectation that details of the government's bail out deal would start being unveiled tomorrow, when RBS reports its results. Barclays was 7.4p better at 105.6p despite analysts at Panmure Gordon repeated their sell advice following a meeting with some of the bank's management.

HSBC added 20.5p to 492.5p as Morgan Stanley shifted its earlier stance, suggesting the bank may not cut its dividend or announce a fundraising alongside its results on Monday. Morgan Stanley said:

"In contrast to back in the fourth quarter of 2008, nearly all the investors we met [on a recent trip to Hong Kong and Singapore] now fully expect a dividend cut at the March 2 results with some also expecting a capital increase. In contrast, we think HSBC will maintain its full year 2008 dividend at the 2007 rate paid and not announce a capital increase."

Overall the FTSE 100 finished 32.54 points higher at 3848.98. But there was no support from Wall Street, with the Dow Jones Industrial Average down around 100 points by the time London closed with US investors unerved by an unexpected fall in existing home sales in January and the lack of detail in Barack Obama's speech to Congress.

Among the risers, Icap closed 25.5p higher at 232p after the interdealer broker gave a positive presentation to Evolution Securities. Barratt Developments added 9.75p to 81.25p despite reporting a £592m half year loss after writing down the value of its land bank. But the company added it was operating within its banking covenants and had reduced debt by £315m in the last twelve months. Later chairman Bob Lawson announced he had bought 61,308 shares at 81.5p each bringing his total holding to 213,149 shares.

Miners were unwanted, with Anglo American down 18p to £10.15 as Citigroup cut its price target from £12.64 to £11.

Price comparison website Moneysupermarket fell 3p to 45.25p after it reported a 9% fall in full year profits, while environmental consultant White Young Green dropped 16.5p to 29p after saying it might breach one of its banking covenants later this year.